Who says SSS is heartless?
This refers to the article titled “SSS to go bankrupt: Ghost of paranoia,” Talk of the Town, 1/24/15).
The Commission on Audit Report, dated Aug. 28, 2015, highlights significant issues on the P427-billion private pension fund:
1. Take note, relative to government-owned and/or -controlled corporations and local government units, the COA normally renders “qualified” opinion. In the 2015 report, the COA expressed an “unqualified” opinion, significantly adding: “The System’s efforts have resulted in improved actuarial soundness.”
2. Reserves at P418 billion to address pensioners and members needs (P33 million) have tripled from P173 billion in 2004. Four actuarial valuations—prescribed by law to determine the viability and life of the pension fund—have been made in 1999, 2003, 2007, 2014 and, correspondingly, the life of the fund was projected to last until 2015, 2031, 2039, 2043 or by 16 years, 28 years, 32 years, 29 years.
However, in the recent proposed law increasing pension by P2,000 (without a parallel hike in contributions), the life of the fund is projected to last up to 2029 or by 13 years only.
3. There’s nothing new about the Social Security System mandate to preserve the fund. Based on the 1999 valuation, the fund’s actuarial life was to last only up to 2015, premised on a “no across-the-board increase in pension.”
In the 2003 valuation, the benefit payments exceeded premium contributions, and a cloud of uncertainty prevailed over the SSS’ “ability to meet financial commitments to pay future benefits of members.” Thirteen years later, that is exactly the basis of the presidential veto which Congress is now hell-bent to override!
Earlier, from 1993-1995 and from 1999-2001, the benefits exceeded contributions. Today, the SSS is in the black by some P44 billion (2014 audit); this will be pooled in the reserve fund to be invested not in speculative ventures but in instruments to ensure liquidity and decent returns.
4. Since 1980, the SSS benefits were raised in 22 instances, but premium contributions were raised in the same period only on three occasions: to 9.4 percent in 2003 (benefits surpassed contributions), 10.4 in 2007, 0.6 and 11 percent in 2014 (3.63 and 7.37 share of employees and employers, respectively, as against 10 and 11 percent in the Government Service Insurance System).
The proposed P2,000-across-the-board hike, according to published reports, translates into a 64-percent increase on the first year, against the maximum 20-percent historical benchmark. The “win-win” P1,000-pension hike proposal, to replace the vetoed P2,000 translates into 30-percent hike or P30 billion more for 2.15 million pensioners, excluding other benefits (burial, leave pay, etc., P46 billion in 2014).
Unknown to many senior citizens, the initial SSS offer of P500 a month represents a 16-percent hike on the average, but to this pensioner, a 30-percent improvement. At P2,000, my take would have more than doubled to P3,800. Receiving such amount is unfair to those who contributed more—like a locker attendant who, at 19, started religiously paying his SSS premium contributions. He will retire for good in a few years.
I can tell the SSS is well-managed, and its staff are attentive and caring. That is the hallmark of sound management! Who says the SSS is “heartless”?
—MANUEL Q. BONDAD, Makati City
